June 6, 2008
In Pursuit of the Next Megabrand
Steve Hughes knows something about creating a megabrand. Fortune credits him with spearheading the launch of ConAgra’s Healthy Choice line. Within four years of its initial rollout, the brand’s sales topped the $1 billion mark.
Today, Mr. Hughes believes he has another Healthy Choice on his hands in the form of Smart Balance. The brand currently stands as the number three in the margarine category but it is the only product licensed to use a patented blend of oils that have been shown to raise HDL (aka good) cholesterol levels.
Sales of Smart Balance have continued to rise since it was first introduced in 1997, while the rest of the category has been flat. Mr. Hughes sees opportunities for Smart Balance to branch out beyond spreads to a whole host of other categories including milk, cream cheese, yogurt, sour cream and oatmeal.
“In a world where everyone is looking at functional products,” he told Fortune, “we are positioning this as a brand that could grow to a billion dollars, a true mega-brand… We’re approaching the end of the beginning now. We’re in second gear now, and shifting to third.”
Discussion Questions: What elements need to be in place to create and grow a megabrand? Does Smart Balance have those qualities?
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Discussion Questions
Poll
Most important element: luck.
Enhanced awareness of health risks is pushing Boomers to purchase healthier products. And if Smart Balance tastes good (time to head to the supermarket and buy one!) it can be a breakout brand.
If a big new health-oriented brand is to emerge with the promise of ensuring long-term health, my thoughts are that it needs to encapsulate multiple trends around the issue to really get a leg up. Good cholesterol is of course one of them. But what about natural food products that shun chemicals as nutrition? And being green, socially responsibility and forward thinking with product offerings? The point is, if I were Mr. Hughes, I’d circle around the holistic health promise and truly, truly differentiate what Smart Balance means as a brand.
Peter Fader made me smile this morning. Thanks Peter.
One approach to building a megabrand is a name that communicates an attitude or lifestyle. Something that can communicate a meaningful benefit across a broad array of products. That’s what Conagra has with Healthy Choice and they certainly could have another one with Smart Balance.
The second road is much tougher. First, start with a really big category–then innovate a product with a unique benefit that addresses a common need better than anything currently available. Swiffer doesn’t come along very often.
Most megabrands we have today are heritage brands. They had the benefit of defining a category for the world. McDonald’s, Coke, Tide and Xerox.
I simply have to agree with Peter. It helps to be smart, and to work hard, and to help “make” your luck. But plain old luck enters into this pretty heavily. I might add here that a gazillion people lay claim to being the spark behind the Healthy Choice launch and ancillary lines, just as a gazillion people claim to have launched the TV dinner, and the Internet. Steve Hughes is a good guy and a very capable marketer. Without the mild heart attack ConAgra CEO Mike Harper had in 1985, however, Healthy Choice never would have happened.
The main element that needs to be in place to create and grow a megabrand is the suspension of disbelief. (And Warren, the proper term is “buzillion,” not “gazillion.” Consider yourself properly chastened.) Smucker’s bought Folger’s yesterday. Talk about a suspension of disbelief! Strawberry coffee? Look out, Starbucks!
Snackwells. Ring a bell? We suspended our disbelief and got burned, but their launch and media support were wonderful. If their claims had been true and supportable, we’d be chewing on their products today. And herein lies the clue: Be able to support an innovative product launch–and accompanying appeal to suspend disbelief–with a product that performs as advertised. Just keep your promise, that’s all consumers want.
A year ago Smart Balance’s stock was $10. Now it’s $8.40. In 2007 their losses were a bit over $100 million, seven times the previous year. It’s not easy to build a brand, and it’s not surprising that it requires great faith and great investment.
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Most important element: luck.
Enhanced awareness of health risks is pushing Boomers to purchase healthier products. And if Smart Balance tastes good (time to head to the supermarket and buy one!) it can be a breakout brand.
If a big new health-oriented brand is to emerge with the promise of ensuring long-term health, my thoughts are that it needs to encapsulate multiple trends around the issue to really get a leg up. Good cholesterol is of course one of them. But what about natural food products that shun chemicals as nutrition? And being green, socially responsibility and forward thinking with product offerings? The point is, if I were Mr. Hughes, I’d circle around the holistic health promise and truly, truly differentiate what Smart Balance means as a brand.
Peter Fader made me smile this morning. Thanks Peter.
One approach to building a megabrand is a name that communicates an attitude or lifestyle. Something that can communicate a meaningful benefit across a broad array of products. That’s what Conagra has with Healthy Choice and they certainly could have another one with Smart Balance.
The second road is much tougher. First, start with a really big category–then innovate a product with a unique benefit that addresses a common need better than anything currently available. Swiffer doesn’t come along very often.
Most megabrands we have today are heritage brands. They had the benefit of defining a category for the world. McDonald’s, Coke, Tide and Xerox.
I simply have to agree with Peter. It helps to be smart, and to work hard, and to help “make” your luck. But plain old luck enters into this pretty heavily. I might add here that a gazillion people lay claim to being the spark behind the Healthy Choice launch and ancillary lines, just as a gazillion people claim to have launched the TV dinner, and the Internet. Steve Hughes is a good guy and a very capable marketer. Without the mild heart attack ConAgra CEO Mike Harper had in 1985, however, Healthy Choice never would have happened.
The main element that needs to be in place to create and grow a megabrand is the suspension of disbelief. (And Warren, the proper term is “buzillion,” not “gazillion.” Consider yourself properly chastened.) Smucker’s bought Folger’s yesterday. Talk about a suspension of disbelief! Strawberry coffee? Look out, Starbucks!
Snackwells. Ring a bell? We suspended our disbelief and got burned, but their launch and media support were wonderful. If their claims had been true and supportable, we’d be chewing on their products today. And herein lies the clue: Be able to support an innovative product launch–and accompanying appeal to suspend disbelief–with a product that performs as advertised. Just keep your promise, that’s all consumers want.
A year ago Smart Balance’s stock was $10. Now it’s $8.40. In 2007 their losses were a bit over $100 million, seven times the previous year. It’s not easy to build a brand, and it’s not surprising that it requires great faith and great investment.